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Rada Kistnasamy Lecture on Reconstitution of the Mauritian Bourgeoisie

08.10.2015

 


Rada Kistnasamy gave a talk on 7 October at the LALIT headquarters on the way in which the bourgeoisie is re-organizing itself, under economic pressures, and the way it is trying to re-constitute its traditional organizations.


 With the 12 year struggle for the Mauritius Employers’ Federation and the Joint Economic Council to unify into a single organization, Rada Kistnasamy said, they seem to be having difficulty because of their different natures, historically speaking.


 The MEF


The MEF dates from before independence, being founded in 1962. At the time with the mono-culture of cane and the arrangement of the entire society around sugar, it was obviously the Mauritius Sugar Producers’ Association (MSPA) that was both the initiator and the organization that held the Presidency of the MEF for its early years. The other sectors, like the port bosses, the edible oil producers, Scott, and a representative of the transport sector were weak and the hotel sector so small as to not even be represented. Their aim, according to the MEF, was to protect the economic interests of the bosses, but over time they also took on functions with social effects – training and private insurance, for example – and clearly took on a political role: they were always trying to influence the Government in favour of the employers’ interests, and almost inevitably against the interests of working people. For example, in the wake of the Sedgewick Report, the private sector was pressured into a 20% wage increase for workers, against which the MEF protested. They heralded the voting of the repressive legislation, the IRA, which they considered quite a gift from the State, which it was. Its political role was formalized by 1965, when for the first time the MEF was representing the bosses formally at the tripartite meetings that the International Labour Organization holds.


 While it kicked off with 14 members, by 2012, it had 1,150 members. And while it began with large sectors, it soon came to unite all sorts of operators from the big bosses to small restaurant owners, or owners of a private college. The MEF also offers services to its members, which draws in new members.


 However, its structure is very bizarre, and undemocratic. It has members that are companies and firms, even big ones. Then the MSPA, which is not a single company but a whole lot, is a member. And these are on the same footing as the owner of a restaurant selling noodles, for example. There is no democratic process for electing members to the Council that runs the MEF. It renews itself by “nominations”, and those nominated then elect a president. So, it has kept a pre-independence structure. The MEF is desperately trying to resolve this problem of lack of democracy, just as they would like to accomplish the related task of standardizing who is member – companies, individuals, organizations of sectors, and how many votes to accord different sized operators.


 Anyway, during the years of existence of the MEF, it has sometimes taken stands that might seem progressive, but this was naturally under extreme pressure from the working class. For example, in the wake of the huge national strike movement of 1979, the MEF began to talk about “Comité d’entreprise” to represent workers, so as to decrease the class conflicts that had become so threatening to the rule of the bosses. And in 1980, in the midst of this crisis, with Mervyn Coombes, a rather forward looking boss, at the helm, he even said that the MEF ought to look into “social” issues” that concern workers. He mentioned canteens for workers, crechés for workers babies and young children, and music for workers to work to. He thought this would increase productivity. With the threat of nationalization becoming imminent as the MMM was rising towards its 1982 electoral victory, the MEF proposed all sorts of concessions. This shows how the balance of class forces affects the bosses’ organizations.


 And this was how the MEF in 1982 set up the MEFPA which was a form of private health insurance for workers – both taking care of social issues, and also making sure it was the private sector controlling the insurance. In fact, this was the very first move towards the ongoing push from the private sector to privatize health care, and build a health care system outside the free government care, a health care system linked to private insurance. It was the first “germ” to attack a unified health service for all. At first, 22,500 people signed up.


 And the MEF also launched its own training programs, educating bosses and their management teams in the legal framework and bureaucratic procedures required.


 And over time, with the ongoing crisis in the sugar cane industry, and its weakening, the MSPA gradually had less and less influence in the MEF, and was no longer in the Chair as a matter of right.


 The JEC


So, that’s the MEF. Then, what is the Joint Economic Council? It was born in 1970, though however much I looked, Rada Kistnasamy said, I could not find out what its justification for existence is.  So, I don’t know what rationalization they gave, he said. Later during discussion, it became clear that, while the MEF represented the bosses as employers of labour and were tied up with the complications of labour legislation, the costs of labour and so on, all the time, the JEC filled the gap of representing the different economic sectors as they emerged alongside the old mono-crop of cane. In fact, its membership proves this.


 It has, Rada Kistnasamy explained, 9 Associations, mainly bosses of a particular sector: MEPZA for the free zone, MSPA, MCCI for commerce and industry, MBA for the bankers, MIA for insurers, AHRIM for Hotels and restaurants, ANM for manufacturers. But, curiously the MEF is also a member.  And the MEF, of course, has members who are also in the JEC.


 So, the JEC is really the organization that has members sitting on different Government and parastatal Boards, and in Commissions that the State sets up. They seem to be part of the State in a more general sense, not just as “employers” of labour that are regulated to some extent by the State. Raj Makoond, for example, who is chairman of the JEC now, is a retired top civil servant in the Ministry of the Plan (when it existed).  Often the JEC is represented by bureaucrats who understand the interests of the sector of capital they represent.


 And the JEC and MEF are often not in agreement. And the JEC is often challenged by big capitalist conglomerates.


 For example, around salary compensation for 2015, the JEC said it was a “challenge” for small companies, but they accepted it, whereas the ENL group said that compensation should only be imposed if bosses have the capacity to pay. For the Budget, there was the same split. The JEC said that the Lutchmeenaraidoo budget was just what was called for, while the ENL group said there was not enough detailed information for them to judge the budget properly.


 Anyway, they are going ahead with their plan to fuse. In fact, they already have a name “Business Mauritius”. They are having assemblies and discussing things, but the Press is giving no news as to what the issues are that are stumbling blocks. But, one thing is certain, there is a lot of pressure in very different directions, because the bourgeoisie itself is undergoing such drastic changes.


 Re-composition in the Bourgeoisie itself 


For a start organizations like the MSPA, representing the sugar sector, are now representing very “unlike objects”. In the 1970’s there were some 22-24 millers who also had massive plantations of cane, and the MSPA represented them. But, in order to escape taxes, the sugar estates began to split their companies into “agricultural” and “milling” as separate entities. So, now the MSPA has companies that are only in milling and others that are only in planting cane, so when there is a dispute as to the sharing of the sugar money, say moving from 70% and 30% to 77% and 23%, their members fight like cat-and-dog. Similarly, some produce energy, and some invest abroad. Some are hurtling more drastically into real estate than others. And Medine Sugar Estate has left the MSPA altogether.


 And this brings us to the really massive changes: the bourgeoisie, around three or four main groups that used to be just sugar cane establishments, after initial expansion into free zone industries and hotels, is now expanding in perhaps three main directions with vertiginous speed:


- investing abroad


- investing in real estate (the Mistry plan)


- investing in financial institutions


 Capital exodus – expanding abroad


In fact, the new Finance Minister Vishnu Lutchmeenaraidoo is facilitating this massive exodus of capital abroad. He is encouraging three main types of investment abroad – Mauritius into Africa, Mauritius-Rodrigues-Reunion, which includes a double pretense that Rodrigues is a “separate entity” and that Reunion is not a colony, and thirdly Mauritius towards the East, in particular China and India. This expansion, Rada said, is not delocalization, but pure expansion.


 For this next section, I’ve relied, Rada Kistnasamy said, on the new edition of the Top 100 Companies. (The rest I’ve relied on reports by and on the MEF and JEC, and on LALIT’s own publications over the years, as principle sources.)


 Let’s start with the old sugar estate companies, as they have reconstituted themselves into firms with interests in industry, hotels, real estate and banks.


 The Terra Group, for example, that is the Harel Freres, have invested in Cote d’Ivoire, Kenya, Ouganda, Rwanda, South Sudan and Burundi, Madagascar. 


 The Alteo Group (Merger DRBC-FUEL) has moved capital mainly to Tanzania and Kenya.


 Omnicane has gone to Kenya, Rwanda, Ghana and what they describe as “East Africa” (Kenya, Uganda, Tanzania?).


 Medine, by way of contrast, seems not to have invested abroad. Their site also makes no mention of it, if they do. They have concentrated on real estate of all kinds and an “education hub” together with foreign partners in joint ventures.


 Other companies


IBL with its interest in pharmaceuticals, IT, supermarkets, and its long list of companies, is investing mainly in the Indian Ocean region, the COI region, in Madagascar, Seychelles, Comoros and Reunion. But also in Gabon, Uganda and India.


 Food and Allied (FAIL) is setting up businesses in Madagascar, Reunion, Seychelles, South Africa and Kenya. They are no longer just in poultry production and marketing, but now also in hotels, the Caudan Waterfront, the Charles Telfair University, and they are expanding abroad and diversifying at the same time.


 In distribution trades


Leal seems to have expanded just towards Reunion, for the moment, while Phoenix beer, has expanded to Mozambique and Seychelles. ABC Motors has expanded towards Mozambique and Seychelles.


 Hotels


The Lux group has opened new hotels in Reunion, China and the Maldives, while Sun Group has also opened hotels in Maldives. The Royal Palm has expanded to Morocco.


 Construction firms


United Basalt, the big construction firm, has expanded to Madagascar and Sri Lanka.


 Textiles


The Esquel Group has expanded to China, Malaysia, Vietnam and Sri Lanka.  The CMT Group has expanded to Bangladesh, while Ciel Textiles has set up factories in Madagascar, India, Kenya, Bangladesh and Botswana.


 So, all these enterprises that are setting up operations abroad still remain in operation here. But, like all imperialists, they tend to rake in higher profits from their exploitation of labour and their operations abroad. And, as I mentioned, the new Government is accelerating this process of capital exodus.


 In particular, the Finance Minister Lutchmeenaraidoo, is favouring the Rodrigues-Reunion link-up, through Air Australe who have opened up a direct flight. Two other sectors are being linked up on this axis: renewable energy in which Reunion has an advance and Bio agriculture. This axis is even joining up to go to Ghana. Lutchmeenaraidoo is taking a 40-person delegation to Ghana, including Reunion bosses. They are going to set up an Informatics Park, at first on 6 hectares and then this will expand to 37 hectares.


 Similarly, for an Industrial Zone is being set up in southern Madagascar on 440 hectares. No doubt the Government will take another private sector delegation there soon, too.


 Links with the East


Although the Jin Fei project has decreased in scope, there will now be a Smart City at Riche Terre on 100 arpents, developed by the Shanxi Investment Group Co Ltd. And the Bank of China is setting up in Mauritius.


 There is a Dubayy company that is eager to go into a joint venture, as strategic partner of Cargo Handling, a form of privatization.


 And on the whole, Smart Cities, IRS and ERS, now under a different name, are setting up everywhere. Agriculture, even cane, is no longer a priority – it will be produced in Africa – while the Mauritian countryside will become one big real estate nightmare, on the lines initially proposed by Percy Mistry, and rightly considered ludicrous! So, together with investing abroad, there is massive speculation in land and building. There is a total disregard for proper agriculture, for food security, and for proper employment for people. In order to maximise their profits, all the big conglomerates have opened up banks and other financial institutions, where the rip-off is bigger. And one last thing to mention, in the Top 100 Companies, the 5th biggest BAI is no longer in existence. Right now, the authorities are trying to untangle how Rs3.5 billion was credited to BAI’s account on 31 December, 2009 in order to mask its bancruptcy and its Ponzi scheme Super Cash Back Gold.


 Debate following the lecture was very rich.